The Dynamics CRM SDK, which allows Dynamics CRM to be customized using .NET framework, opens the entire object model to developers to build solutions against. It does this using reusable application services and a multi-tenant architecture and allows to build multiple Line-Of-Business xRM applications on a single platform.
Microsoft markets Dynamics CRM as an xRM platform on top of which solution builders can build custom xRM applications. An xRM (Extended Relationship Management) solution extends CRM principles to help manage important business relationships even other than Customers like employees, partners, suppliers, distributors, vendors, government agencies and more.
Some aspects of Dynamics CRM that can be customized are -
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Security
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Forms and Views
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Personalization
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Entity customization
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Reports
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Workflows
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Client Extensions
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Form Scripting (for client-side customizations)
Dynamics CRM 2011 solutions are packages of customizations that allow you to build and maintain Dynamics CRM/xRM applications, and to move them from one organization to another. Managed solutions can allow customizations to be treated like add-ons, which can be installed/uninstalled easily at an organization level, whereas unmanaged solutions allow quicker customizations with lesser restrictions.
To start customizing various aspects of Dynamics CRM, you can start with the official resource center, which provide documentation for both point-and-click customizations as well as the developer documentation. The Developer Training kit, the MSDN site and the SDK are also a good places to look at code samples and documentation.